RSU Tax Guide · Multi-state
RSUs and multi-state taxes: moving out of California
Relocating to a no-income-tax state before a big vest sounds like a clean tax win. It often isn't. California and New York have the most aggressive RSU sourcing rules in the country, and they can follow you for years.
RSUs are sourced by workdays, not residence at vest
States generally allocate RSU income by the ratio of workdays in that state during the vesting period (grant date to vest date) — not where you live when the shares vest. Example: you're granted RSUs in California, work there for 3.5 of a 4-year vest, then move to Texas. California can still tax roughly ~90% of that tranche, even though Texas has no income tax and you're now a Texas resident.
New York's "convenience of the employer" rule
New York is harsher. Under the convenience rule, days you work remotely for a New York employer can be counted as New York workdays unless your employer requires the remote location. Move to Florida for your own reasons and New York may still consider that RSU income New York-sourced.
What to do
- Keep dated records of where you worked during each grant's vesting window.
- Expect a credit for tax paid to the other state in most cases — but file in both where required.
- For a large move-and-vest, talk to a CPA who handles equity comp; the dollars are large.
Our calculator estimates a single state of residence. For multi-state allocation, use it per state to bracket your exposure, and compare a California vs Texas scenario.
FAQ
If I move out of California before my RSUs vest, do I still owe California tax?
Often yes. California sources RSU income by the share of workdays you spent in California between grant and vest. If you worked there for most of the vesting period, California taxes that portion even if you vest as a resident of Texas or Washington.
What is New York’s convenience rule?
New York can treat days you work remotely for a New York employer as New York workdays unless the remote work is for the employer’s necessity. This can keep RSU income New York-taxable after you move.
How do I track this?
Keep records of your grant date, vest dates, and the state where you worked during each vesting period. Allocation is per grant tranche, so good records prevent over- or under-paying either state.